"Tree hugger" is a phrase used to describe environmental activists. The word originated in the 1970s in response to the Chipko movement in India, which was comprised of a group of villagers opposed to commercial logging. The group became known for its tactic of hugging trees to prevent them from being cut down by loggers.
Although it began as a reference to activists who literally hugged trees, the phrase is now used metaphoricaly to refer to people who "embrace" environmental causes. The implication is that they love nature a little too much.
In the United States, the term is applied to a wide range of environmental activists. Groups such as Earth First! that engage in acts of civil disobedience, as well as individuals like Judi Bari and Julia "Butterfly" Hill--who lived in a California Redwood tree for 738 days in order to prevent it from being cut down--are referred to as tree huggers.